XMFSinchiruna (28.54)

Market analysts at a loss to explain today's action - here's the only one I saw that rings true.

July 07, 2008 – Comments (9)

My vote for market commentary of the day...  from a talented metals trader I follow:

I make a motion that we have the Congress declare every Friday a national holiday. I had no idea that all that was necessary to fix the US economy and in particular, the US Dollar, was a holiday weekend! Instead of messing with bills to curb speculators from operating in the crude oil market, they could name each Friday after one of the Founding Fathers and declare the government closed for the day. That way, on Monday morning, when the markets reopen for business, the Dollar could rally, crude oil would go lower, gold would tank, the grains would go limit down and the US equity markets would move higher. Why, in just a couple of months, the US could move from a current account deficit and a budget deficit to a position of the largest creditor nation on the face of the globe! Voila! Problem solved. See how easy that is? Hey Congress- no need to thank me for this nugget of advice – after all, I am just doing what any patriot who loves his nation would do – right?
 
Do you ever get the idea that you are watching the final stages of a cheap horror flick?  To give you an idea how absurd the US markets have become and why their inexplicable movements are making [syn. for donkeys] out of wire service-quoted "analysts", check this out. The "experts" quoted said that the reason that the Dollar was higher in today's session was because CRUDE OIL WAS LOWER. Just a few stories above that one, another "expert" says that the reason Crude Oil was lower was because the DOLLAR WAS HIGHER!
 
 Aren't you glad that such stunningly insightful, bold, daring and brilliant comments are available to help we lesser mortals understand the markets? I sure sleep better knowing that such wisdom resides in the world of market analysts! So, which one is it fellas? Is the dog wagging the tail or is the tail wagging the dog? Here’s a bit of advice to the pundits – I am obviously in the advice dispending mode today – “hey guys – if you don’t know why the markets are doing what they are doing just keep your mouths shut and save yourselves from looking like first class nitwits”.
 
How’s this for another example of idiocy – analysts all state that the reason the US equity markets were higher early in the session was because of the weakness in crude oil. Then, as if to deliberately throw egg on the face of the analysts, the US equity markets decide to drop into the toilet even as the price of crude oil continues moving lower! Whoops! I can see we are going to need some new headlines quick – “DOW SINKS ALONG WITH SINKING CRUDE OIL AS ECONOMISTS FEAR LOWER GASOLINE PRICES WILL CAUSE CONSUMERS TO SAVE MORE MONEY INSTEAD OF SPENDING IT FOR RETAIL SALES RESULTING IN LOWER SALES FIGURES NEXT MONTH”. 
 
Or how about this one:
 
“SINKING CRUDE OIL PRICES SANK THE US EQUITY MARKETS IN TODAY’S SESSION AS ANALYSTS PREDICTED THAT HYBRID CAR SALES WOULD COLLAPSE OVERNIGHT PUTTING DOWNWARD PRESSURE ON GM AND FORD. ALSO UNDER PRESSURE WERE SHARES OF BARNES & NOBLE ALONG WITH AMAZON.COM  AS SALES OF GLOBAL WARMING BOOKS TOOK A NOSE DIVE.”
 
Meanwhile, the usual newsletter writers who love to buy gold high and sell it lower, or sell it low first and then buy it back higher, are at it again. Having been made monkeys out of  by the continued orchestrated takedowns in the gold market, once again their convictions when it comes to gold are dictated by the day to day gyrations in the market. These guys have become slaves to technical analysis to the point where they no longer seem capable of serious thought. If gold goes up, they are wildly bullish. If it goes down, they are depressingly bearish. Lost are the fundamental reasons why gold has been in a seven year long bull market.
 
As I pen these short comments, bonds are moving higher again as panicked equity traders reflexively run helter-skelter into the “safety” of US bonds. That buying has pushed the yield on the Ten Year down to 3.89%.
 
Corn is locked limit down on supposedly improving weather with nearly 200,000 contracts offered at that price for just the September and December contracts alone. Soybeans are down the limit in November with Wheat also down the limit. Palladium took a whooping this morning dropping from $462 to $448 while platinum sank $46.60 lower. Copper was hit hard as was silver which fared much worse than gold. There might have been additional silver/gold spreads unwound in today’s session.